Safaricom is dominant on both voice and mobile money, holding more than 80 per cent of the market share in both market segments. The telco is also dominant in terms of network infrastructure, owning the bulk of cellphone towers in marginal and low populated areas. However, despite receiving accusations in the past from rivals such as Airtel Money, Safaricom has insisted that it has never abused its dominance in those market segments. Therefore, in a bid to promote a level playing ground and a healthy competition, the Communications Authority (CA) of Kenya has intervened by forcing mobile phone operators to share money transfer infrastructure. An interoperable mobile money platform has been established to allow sharing by other mobile money transfer service providers and consumers.

This move by the Kenya’s Communications Authority is expected to usher in a new era of operations in East Africa’s largest technology market and may not be surprising to trickle into other countries’ where mobile money solutions are dominated by only one major player, while others are reduced to mere spectators, for instance, in Zimbabwe where EcoCash dominates 97% of the market share. The Government through its ICT Minister, Supa Mandiwanzira, has on several occasions openly admitted to the dangers of more than 90% of the transactions being controlled by one mobile network that through the ICT Ministry and POTRAZ implemented an infrastructure sharing policy, so it may just be a matter of time before moving onto initiating a mobile money transfer infrastructure policy just like what has happened in Kenya.

Why do we say that it’s a clear victory for Airtel?

Because Airtel was always complaining to the regulator that Safaricom was abusing its dominance in the market. In 2015, Airtel complained that Safaricom was excluding other mobile operators’ products from its retail outlets, which resulted in the regulator finally ordering Safaricom to open up its more than 83,000 mobile money agents to host other services beyond M-Pesa—a clear victory for Airtel.

Again, Safaricom, once sued rival Airtel for trademark infringement, claiming that the latter had been including M-Pesa logos during the promotion of Airtel Money, its own money transfer platform. Therefore, with all these drama between these two rivals, it is very clear that Kenya’s leading mobile firms have been at each other’s throats for a while now.

M-Pesa has been so successful that even traditional banks came to see it as a serious competitor. At first, these banks sought to limit M-Pesa by seeking regulations from the Kenyan government, but increasingly they have begun to offer mobile banking services that attempt to disrupt M-Pesa’s monopoly of the mobile money market.

So what has recently changed between the two mobile money rivals?

M-Pesa’s position as the leading cash transfers service is set to face a new challenge with the launch of mobile money interoperability, which will see users send and receive money across networks in real-time.

Mobile money interoperability has been proposed as one of the possible solutions to Safaricom’s dominance of the telecoms market. Mobile money service users are now able to move cash across rival networks in real-time as telcos integrate systems. The cross-network transfers will be limited to Airtel and Safaricom.

“One of the key reasons we need interoperability is to make sure that people are not limited by a closed network, you should be able to send money to anyone on any network and receive money from anyone.”

Though Ecocash has helped promote a mobile money economy, its dominance hardly can be ignored and has over time frustrated the Zimbabwean government. Often times the ZimbabweanInformation Communication Technology and Cyber Security Minister Supa Mandiwanzira, has expressed discomfort over EcoCash dominance of the country’s mobile money payments system saying this exposed the country to risk, should the largest telecommunications firm’s systems fail.

During a Mobile Payments Conference held in Harare last year in August, the Minister openly admitted its discomfort in Ecocash’s dominance and is quoted saying;

“Ninety percent of the transactions are being controlled by one mobile network. That is a disaster.”

“It may be a commercial success but it’s a disaster if we look at it from a public sector point of view. What happens if that system fails at a critical moment? That means we have disrupted the entire nation because we have relied on one supplier.”

“You cannot hold an asset that you were given by government through a license and think that it is entirely yours. Others must access what you have built but they should do so at a fee, a reasonable fee. That is the message we have given to Econet, Netone and Telecel. You own the frequency to the extent of your license but we can also tell you what to do.”

Therefore quoting his last words “… but we can also tell you what to do,” means that since it’s already an issue worrying the government, could it be just a matter of time before it also enforces cross-network transfers just like in Kenya where mobile money service users are now able to move cash across rival networks in real-time as telcos integrate systems.

He acknowledged Telecash had failed to make a mark in the mobile money space.

Government wholly owns another mobile telecommunications operator, NetOne, whose own mobile payment service, recently re-branded to now OneMoney after also struggling to gain a foothold in the market. The re-branding of NetOne’s OneWallet to OneMoney also witnessed the mobile money platform shifting from the old Gemalto system which had let them down in the first instance, to a M-Pesa replica system which has registered major success in the East African country, Kenya, as pioneers of mobile money.

So should we be expecting another showdown between Econet owned mobile money platform, EcoCash and government-owned NetOne – OneMoney and Telecel – TeleCash? Well, it’s just a matter of time before we find out, because who would have thought that cross-network transfers would be possible between Airtel and Safaricom.

In a nutshell, as mobile money services continue to expand, more proactive policies are required to ensure that the market can continue to grow and serve local consumers.

About the AuthorRowland Osahon

Straight talk. I tell it like it is. Obvious but elusive. I do love technology and marvel comics/films. No you can't see me. I am like "The Stig" in Top Gear or like Lagbaja. Now you see me, now you don't